Monday, October 19, 2015

Investing in Comics Part 1

A topic
which often comes up in the world of comic collecting is that comics are a good
monetary investment. This is often
followed by the advice to collect what you love. Fair enough.
I’ve made some decent money selling comics throughout the years. Would I look at them as a retirement plan,
however (this coming from the prospective of not owning a store)?

No.

I do
believe comics are a good investment. I
don’t believe, like I’ve read time and time again, that they are recession
proof. The value of comics, like any
other collectible, can take value hits based on supply and demand, the state of
the economy and so on. Currently, most
of the short-term collector market is being driven by the comic-based
movies. As soon as word gets out that
some character is going to be featured on the big screen, investors start seeking
out its first appearance. If I’m a
collector or investor looking to sell previously purchased issues, that’s good
news. If I’m an investor who doesn’t own
any of those issues, but is looking to find them and make a quick buck … well,
I’m not a very savvy investor.

Buying
comics while they’re hot is usually not a good idea, and this holds especially
true for comics that are hot simply because of films. The comic book film genre will cool, and
these comics will come back down in price.
As an investment, these comics would have been good to grab back when
they first came out or well before a film was announced. Hence, collect what you love. (If you are investing for a short term
turnaround, you may see some profit, but you have to remember that there are a
lot of other people doing the exact same thing, and that will actually drive
your profits downward as it causes the price you pay to obtain an issue to be
inflated too dramatically.)

If you
are an investor just buying whatever you think will rise in price over time,
and you want to avoid the advice of buying what you love to read, you’ll want
to look at books with a crossover appeal.
Crossover appeal assures you that your investment will have some kind of
value no matter what happens in one market.
A good example of this is Disney’s Pocahontas
comic.

If you
bought this comic when it came out in 1995 it would’ve cost you $4.50. One would think if you were buying it simply
as an investment you would have been eyeing the comic market, the Disney market
(which is huge), the film tie-in market, and possibly the market for
female-centric collectibles. The good
news is that each of these markets, while they do have some crossover appeal,
is separate from one another. The comic
has its worth to comic collectors, but a Disney collector may be inclined to
pay more than the comic collector (either through ignorance or perceived worth)
for the issue. From an investment
standpoint, this particular issue has more potential long-term value than, say,
a random issue of Action Comics from
the same year if only due to the size of the audience that will want to buy it.

The 2014
value placed on that Disney comic in Near Mint ungraded condition by the Overstreet Comic Book Price Guide was $7.50. Selling it at that price would not seem to
give you a huge return, but you actually came close to doubling your money (over
nearly twenty years, which is not unheard of in the comic field) but that is
just to the comic collector market. The
price willing to be paid by other collectors could’ve been higher depending on
what they were buying it for. The fact
remains, though, that if comics are to be a long-term investment, you have to
treat them like a long-term investment (and twenty years isn’t that long). Yes, you can make fast money by buying and
selling what is hot in the moment, but you will usually burn out financially in
the long run as the market fluctuates as badly or worse than the stock
market. Higher risk leads to potentially
higher rewards, but also bigger losses.
The short-term comic investor market rarely gets to buy low and sell
high. Keep that in mind.

The
bottom line is: you can make money investing in comics. People do it every day. To do it, however, means you really have to
know what you are doing. You have to
educate yourself on the product even moreso than when you invest in
stocks. The easiest advice to give a
newcomer is the age old invest-in-what-you-
love-to-read line, but there is one other thing that should be said, too: Expect
nothing to come of your investment. If
you are expecting that issue featuring the death of Superman to worth hundreds
of dollars, you are going to be disappointed.
If, however, you bought it for a few bucks, enjoyed reading it (if you
took it out of the special sealed bag it was sold in), and then you get a few
dollars more than you paid for it – great.
You just came out ahead, and that is the absolute best scenario one can
expect from investing in this hobby.
Yes, there are the rare moments where an investor makes over a million
dollars, but that is not the norm, and nor will it ever be.